Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 360 - 379)



  360. Do you normally have a percentage?
  (Mr Bloom) No, it is done on an hours and rates basis. It is not done on a percentage.

  361. On an hours and rates basis. What would be the normal rate per hour, since we are enquiring into this matter, for someone of your seniority?
  (Mr Bloom) The average for my seniority or the average for the entire team?

  362. Let us start with you and also have an average for the lot?
  (Mr Bloom) Okay. For the lot it would be around about £250 an hour. For me, about £450 an hour.

  Chairman: Oh. That is helpful.

Mr Donohoe

  363. Given what you have said about the length of time in terms of the company being in administration, how are you making sure and ensuring that the management attention is not being diverted away from the day to day business of running the railway?
  (Mr Bloom) We have devolved day to day management of the railway to the management team. We have not made any changes to the management team. If you like, the administration is an overlay with the additional responsibility of ensuring that the transfer takes place.

  364. What you said earlier suggests that could be for some significant time. Mr Marshall, as I understand it, leaves in six months.
  (Mr Bloom) Mr Marshall handed in his notice on 8th October, I think it was, and agreed to serve the six months' notice. Obviously one of the things that we have to think about over the course of the next couple of months is succession for Mr Marshall, you are right.

  365. Given what the Chairman has already asked in terms of the share pay out, what pay out will be made to the Chief Executive when he leaves, given that there was quite considerable public concern when his predecessor left the company? Have you any control over that?
  (Mr Bloom) He has a contract with the company, in fact I suspect he has a contract with both companies.


  366. Does that company still exist?
  (Mr Bloom) Yes.
  (Mr Marshall) Yes.
  (Mr Bloom) The company does not cease to exist because of administration.

Mr Donohoe

  367. The freedom is there of that company to make a pay out but the public would not see it as something that should happen.
  (Mr Harding) Could I clarify? Mr Marshall has given notice he will work his period of notice. It is not expected he will be paid any compensation at the end of that period. He will leave on 7th April.

  368. Can I then just finish by asking you a question in terms of the West Coast Main Line and in particular where it crosses the border. Just exactly what are you doing in terms of the division that there is at Government level in terms of the responsibility for the railway in making sure that the funding is going to be there for the upgrading of the West Coast Main Line north of the border?
  (Mr Rollings) Can I perhaps answer that. I have been looking at the major projects, including West Coast Main Line. We have been reviewing and assessing the major projects and we are in the process of so doing. Clearly there are issues as regards scarcity of resources and we are looking at costs and time in terms of achieving what is set out for the projects. At this time the funding issues have been referred to, I think, by the Secretary of State as perhaps being wrapped up in SPVs and those sort of areas but primarily —


  369. Special Purpose Vehicles.
  (Mr Rollings) I do apologise. Primarily the funding will be through Government, at the moment, and the recoveries from the track access charges.

Mr Donohoe

  370. Is that Government south of the border or Government in Edinburgh or a bit of both?
  (Mr Rollings) That is a very good question.

  371. I know it is a good question.
  (Mr Rollings) I am not really able to answer at this time as to how the division is made between the public purse north or south of the border.

Miss McIntosh

  372. If I can address the first question to Mr Bloom. The model that the Government is posing, is it based on any existing model in any other country?
  (Mr Bloom) We have not had a firm proposal put to us by the Government. We have seen what everybody has seen in the press about the proposed model going forward, the company limited by guarantee, the not for profit organisation. As I understand it, it may be based on the Welsh Water model in some way or form but no formal proposal has been put forward so I cannot really comment in any detail.

  373. How do you think the decision will be taken ultimately? Will it be the Government?
  (Mr Bloom) As I mentioned in the introduction, it is for the Secretary of State ultimately to decide where he grants the licence obviously with also the agreement of the Strategic Rail Authority and the Office of the Rail Regulator. What the Secretary of State has announced is a preparedness to listen to proposals that are put forward, to look at those and then make a decision on where the licence should be granted.

  374. Could I turn to Railtrack and ask, the line I am most familiar with is the East Coast Main Line. I understand the improvements up to 2003 were agreed by Railtrack and by the SRA, is that a proper understanding?
  (Mr Marshall) Yes, I think you are referring to phase one of the East Coast Main Line, the Leeds First Project and so on. That was initiated, in fact, and funded by Railtrack off its own bat and is due for completion then, as you indicated, because we wanted to get on with it. That was privately funded by Railtrack.

  375. Are you aware that the Strategic Rail Authority have retained consultants to look at a potentially totally new line on the East Coast from London to Edinburgh? If you are aware of that or not aware of that, what would the implications be for the projected improvements to the existing East Coast Main Line?
  (Mr Marshall) The reality now is clearly that the Strategic Rail Authority, to the extent that the Government permits it, is in the driving seat for determining what upgrades, if any, proceed beyond phase one which is already committed, £260 million scheme, and will be completed. I am aware indeed that they have been looking at a number of options on the East Coast Main Line and have got consultants involved and they are working very closely with our own people. That work is underway. It is unclear where that will lead, not least given the priorities for funding upgrades and the uncertainty, if the assumption that all new upgrades will be on Special Purpose Vehicles, as to the timing and, indeed, the nature of how those schemes will go forward.

  376. Can I just be blunt. Is it fair to ask people to make a major investment in an existing line for a two year extension when that whole line may be brought into question by a competing line within five or ten years?
  (Mr Marshall) I will be equally blunt in response. A strategy is needed for where upgrades are going to be done and how and by whom before anybody would be particularly wise to put investment in.

  Chairman: Mr Stevenson, would you like to be blunt?

Mr Stevenson

  377. Yes, I will try. To the administrators, please. I understood you to say that you had three objectives: transfer as a going concern, day to day management of rail network and developed interest for the future of the company that may emerge.
  (Mr Bloom) One is really substituting —

  378. Given that the day to day management you have devolved to the present management of Railtrack, as I understand it, is it fair to assume than that your primary objective is to develop interest in the disposal of this company as a going concern? If so, what are the elements that would construct a company and make it a going concern?
  (Mr Bloom) The first part of the question, which is what we are doing on the day to day, whilst we have devolved large amounts of the responsibility to the board of directors there are clearly quite a lot of things that we need to do and there are a lot of issues that arise from the administration itself. The way that we have effectively divided the work is that the administration team deals with those issues that have arisen as a result of administration itself.

  379. Who is running Railtrack?
  (Mr Bloom) The board of directors with us dealing with issues that are arising from any of the administration side.

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